How V’landys saved six NRL clubs from COVID extinction

Six NRL clubs were in danger of going broke and being lost to the game at the height of the COVID-19 pandemic, such was the catastrophic position of the sport's finances.

For the first time independent commission chairman Peter V'landys has revealed the extreme threat to the survival of battling Sydney franchises and the perilous position of the entire game.

In an extraordinary two-part interview, V'landys and former Queensland premier and former ARL Commission chairman Peter Beattie take us inside the $2 billion TV broadcast talks that have saved the game and explain the brutal parting of ways with NRL chief executive Todd Greenberg.

The V'landys crisis-management business model to achieve a May 28 rugby league resumption is now the envy of corporate Australia and international sport.

THE FINANCES

On Saturday March 21, at a time when there were predictions 150,000 Australians could die, V'landys spent the day poring over NRL financial spreadsheets.

He is an accountant by profession with a speciality in analysing figures and cost structures. He had every expense line, every detail on revenue.

"When I used the word catastrophic I was thinking this was bad enough to send five or six clubs broke," he explains, "And how would we have got them back?

"We had no idea we'd be back in three months or a year. It all was unknown.

"I was so concerned for the clubs. They were getting no money through the gate, memberships were gone, no poker machine revenue, no broadcast money and had sponsors dropping out.

"They had all this expensive cost structure with football departments and employees across their businesses. Seriously, how were they going to survive?"

The horrible possibility of starting up again with only 10 clubs was considered.

"We could have had a situation where the game was unrecognisable by the time we came out of it," V'Landys said, "What if we'd had to go to a 10-team comp? I was horrified to even think about it."

LISTEN! In a special edition of The Daily Telegraph NRL Podcast, Sports Editor-at-large Phil Rothfield tells Adam Mobbs about his behind-the-scenes story on how Peter V'landys and the NRL overcame a litany of obstacles to become the first major sporting code in Australia to return to the field.

Coronavirus brought forward a train crash that was always going to happen in rugby league.

If there was an intensive care unit for sport, the NRL was first patient in, floored like so many others by the COVID-19 pandemic. There would be 16 beds - one for each club.

"This is not a beat-up," says Peter Beattie, "Seriously, we were absolutely stuffed. Rugby league as we knew it could have fallen over and folded."

The intricate detail around the NRL reopening on Thursday night is sport's most remarkable comeback story, driven so relentlessly by a man who didn't jump daily hurdles, but crashed through them.

"V'landys is a warrior," said Roosters boss Nick Politis, "He'll set a goal and then crash through brick walls to achieve it … and he knows how to handle people."

Beattie points out: "When was the last time you could say rugby league was miles ahead of the AFL? They've been following us for once. It's all Peter.

Peter V’landys reveals how the NRL survived the COVID-19 crisis and Todd Greenberg’s departure to sign a $2bn broadcast deal and relaunch the 2020 season.

"I'm not a dramatic person and I don't overstate it … we had no revenue, no assets, nothing.

"Channel 9 had told the share market they were going to save $130 million. Who was going to save the clubs and pay the players? Seriously we were stuffed, like right on the edge of the cliff."

The outlook is now brighter around the game.

Cost cuts were immediately implemented at NRL headquarters and around the clubs with 90 per cent of staff sent on leave or getting the Job Keeper allowance.

At the NRL no-one could spend more than $1000 without approval from CFO Tony Crawford.

Executives took 25 per cent pay cuts. Still, only game-day operations staff and commercial revenue employees are back working full-time.

THE CLUBS

V'landys is hell bent on saving all 16 clubs. He's on their side big-time because he loves the rivalries, the tribalism and suburban ground football.

He knows however they need to work smarter.

"I don't blame the clubs because they're all there to win the comp," he said.

"The successful clubs might have revenue to support spending spend $6 million on the footy department.

"To compete against them, smaller clubs have coaches who think 'the opposition is spending $6 million so we need to'. They can't afford it.

"We had a false economy. They'll do all they can but sometimes their decisions are not the brightest."

The TV deal

This was by far V'landys' toughest assignment. He often used the word 'brutal' to describe negotiations.

Initially Channel 9 wanted out. This is a fact. Doing it tough like all media organisations, they recognised an opportunity to save $130 million if the competition was shut down for the year.

Insiders have revealed the network had been losing almost $50 million a year from rugby league in a soft sales market with shrinking ratings. This year was shaping as even worse.

Racing NSW CEO and ARLC chair Peter V’landys. Picture: Jonathan Ng

The difference in these TV talks compared to previous negotiations is that there was no bidding war.

Despite reports to the contrary, rivals network Channel 7 or Channel 10 were at no stage serious players. Put it this way, there was never going to be another Super League war over the rights.

There had been talk of Netflix, Amazon and all the giant global players wanting part of the action - but there was never any genuine interest.

Nine boss Hugh Marks knew this and even threatened to walk away from the game.

"It's not a given that NRL has to be part of our future," he said, "We're a business that actually is now less reliant on live sport. It (NRL) has to just pay its way like all of our content does."

"V'landys is a warrior. He'll set a goal and then crash through brickwalls to achieve it,"

Roosters boss Nick Politis

An NRL source revealed Marks even once said: "I'm out … go to Channel 7."

Foxtel played hardball, too. Yet, realistically, while the pay-TV network could always survive without rugby union and soccer, they were stuffed without rugby league.

Eventually Nine realised the public relations backlash was becoming too severe.

If they were to pull out it could potentially bring the game down from the clubs to grassroots.

There were reports Marks was told by his board to make the deal happen. No more threats of abandoning the negotiations. The fans/viewers had to come before shareholders.

Rugby league had always been in the network's DNA. They could not afford to alienate their bread and butter audience. Not while the Today show was trying to make up ground on Sunrise and their nightly news bulletin was neck and neck with Channel 7.

V'landys worked hard to rebuild the relationship with Nine. Some initially thought he was too soft when he even apologised to Nine for the state of the NRL.

"My focus was getting a deal for the game and ignoring the noise in the background," he said.

"I didn't want to go into war with them because you get better results if you have a relationship. They had no trust in the NRL whatsoever, especially Channel 9, who thought they'd been dudded many times. To a certain degree I could understand their frustrations over the (NRL's establishment of a) digital department.

"And you don't do that to your two major partners. My first objective was to win their trust back and to deliver what I told them I could."

THE TALKS

"I'd prefer someone coming in boots 'n' all rather than sugar-coating around the issues. You've got to be genuine in these sort of negotiations. That way you can address their concerns.

"You've also got to respect the person on the other side of the table.

"He was doing his best for his organisation. How can you bag that? Same with (Foxtel CEO) Patrick Delany.

"Were they going to lie down and say 'take whatever you like'? Of course not. They fought tooth and nail. It did get brutal but that's business."

Business deals that are often done over a long lunch at a flash restaurant have a different feel.

Nine CEO Hugh Marks. Picture: AAP/Rohan Thomson

COVID-19 meant Zoom, Facetime, phone hook-ups or face-to-face at Racing NSW or the NRL with plates of sandwiches.

V'landys was like a front-rower in the old softening-up exchanges, trying to break down his opponent. Then acting CEO Andrew Abdo joined the meetings to work through the finer detail.

"We had to show we were genuine," V'landys said. "And Andrew was fantastic. We'd re-established relationships."

Could he have realistically lost Channel 9? And how did he deal with suggestions from Nine's ''always independent'' newspapers he was in News Corp's pocket?

Nine's first offer was less than half their original agreement. "Many times I was worried they'd pull out," V'landys said. "Hugh could genuinely see no benefit in Channel 9 having rugby league.

"And the News Corp Fox Sports business - ask anyone who has been in the meetings I've had with them over the years. I've had a stack of blues with them because they know I'm always trying to do the best for my business.

"At the end of the day all parties acted in good faith and we got an outcome."

GREENBERG'S EXIT

"It could have got ugly," said one insider, "but Peter gave him the dignity to resign."

V'landys refuses to discuss Greenberg's departure because of a confidentiality agreement.

Informed sources, however, reveal there was a complete breakdown of trust between the pair.

V'landys, at this stage, had assured Nine they were talking to no other network. It could have been seen as an act of sabotage. "It would have pissed off Channel 9 big time," said a source. "V'landys was trying to build trust."

Greenberg's departure on April 20 allowed V'landys to get the television negotiations into full swing.

Former NRL CEO Todd Greenberg. Picture: Matt King/Getty

Publicly he had supported Greenberg because he had to, despite a tsunami of resentment that was coming from all directions.

The clubs, the broadcasters and the state bodies all wanted him gone. He had lost the confidence and trust of all major stakeholders.

It was his mixture of arrogance and overconfidence, which V'landys even admitted in an interview in early March.

"There is a bit of an issue," he said, "and I can't hide it. Some of the clubs certainly aren't supportive. I don't think he's arrogant, but some other people believe he is."

Greenberg was often accused of lacking transparency. Clubs' requests for financial/commercial information were often just ignored.

When TV executives made it clear Greenberg was no longer welcome at broadcast rights meetings, V'landys knew it was time to act.

On the morning of April 20, with the support of the commission, he rang Andrew Abdo to offer him the role.

The one thing that had been holding him back was Greenberg's relationship with Premier Gladys Berejiklian. They were tight and the NRL needed the Premier and all key politicians onside if the May 28 resumption date was to be a realistic target.

The Premier had even been spotted the week before at the Oatley Hotel in Sydney's south at the 50th birthday party of Greenberg's wife Lisa.

V'landys had cabinet powerbrokers onside but the Pemier was a Greenberg fan.

This is where long-time Roosters chairman Nick Politis would have stepped in.

He has a direct line to the Premier and the charm to smooth relationships. In the end the Premier rang V'landys to assure him the government would continue to support the game on the day after Greenberg left.

MONEYBALL

The game needed cash to survive but the big four banks are reluctant to lend money to down-and-out footy codes.

In 2017, then NRL commission chairman John Grant tried to borrow $30 million for emergency cash flow but got rejected.

If the loan goes bad, the banks foreclose on assets but the NRL had none.

The potential public relations backlash for NAB, Westpac, CBA or Westpac from having to close down a bad debt with a code like league is not worth their risk.

Roosters supremo Nick Politis. Picture: Brett Costello

Melbourne Storm chairman Bart Campbell came to the rescue, securing a $250 million line of credit from UK financiers, brokered by London firm Oakwell Sports Advisory. Still, one club boss blew up and asked: "What's Bart's cut?"

For the AFL it had been much easier. They used their ownership of Marvel Stadium as security for a $600 million credit facility with NAB and ANZ.

At least the $250 million gave the NRL a lifeline and, more importantly, some leverage in that they wouldn't have to completely roll over in tough broadcast talks with Nine and Foxtel. Now they weren't as desperate.

TO HELL AND BACK

March 10: Bulldogs Corey Harawira-Naera and Jayden Okunbor are stood down for having sex with two schoolgirls after bringing them back to the team hotel during the club's visit to Port Macquarie for a trial game. It is understood both females were above the age of consent and the sex was consensual.

Nine informs NRL that it would not make its quarterly payment to NRL on April 1. The broadcaster also indicates plans to both renegotiate its current rights deal and extend its boadcast partnership with NRL beyond 2020. Nine and Foxtel had signed a $1.8 billion deal to televise the NRL for five years from 2018.

March 29: Reports surface that the Sydney Roosters and Warriors may withdraw their NRLW sides to cut costs during the pandemic.

March 30: The NRL announces a recovery plan - $40 million in monthly payments for clubs between April and October to cover operational costs. The NRL also announces it will reduce its operating costs by 53 per cent, including a 95 per cent reduction in staff and 25 per cent pay cut in executive salaries during the shutdown.

Nine tells shareholders it would save $130 million this year if the 2020 NRL season was axed.

April 1: Bulldogs players Jayden Okunbor and Corey Harawira-Naera are deregistered by the NRL for their schoolgirl sex romp.

April 2: Players cop a 71 per cent pay cut. The NRL and the RLPA agree that $24.6 million would be distributed to players to soften the financial blow of COVID-19 on the game.

Players agree to forego five out of 12 months' salary if 2020 season is unable to resume.

April 3: The Daily Telegraph reveals that the NRL has launched Project Apollo, an Innovation Committee headed by Wayne Pearce, to restart the competition. Project Apollo was initially working towards a restart date of June 1.

April 9: Project Apollo recommends that 2020 season resumes on May 28. ARLC endorses the proposal.

April 9: Channel 9 accuses NRL of mismanagement, squandering millions of dollars from broadcast rights deals, and threatens to walk away from the game.

May 11: NRL slaps Cleary with a $30,000 fine and a two-match suspension for being "untruthful" with the NRL Integrity Unit about hosting visitors in his home during isolation. Cleary's housemate and teammate Tyrone May also cops a $15,000 fine and one-match suspension failing to co-operate with the investigation.

May 13: The ARLC announces that only one on-field referee would be used for the rest of the season. The body also announced that ruck infringements would now warrant six more tackles, rather than a penalty.

May 14: The referees union files a complaint with the Fair Work Commission over the NRL's new one-ref system and threatens to strike. Cartwright granted medical exemption from Queensland Health officials to play this season without flu vaccination.